The Role of ERC-3643 in Real World Assets (RWA) Tokenization

Miłosz Mach

12 Jan 2024
The Role of ERC-3643 in Real World Assets (RWA) Tokenization

Historically, the conversion of assets from physical to digital formats has been fraught with regulatory ambiguities and burdensome accessibility for micro-investors. Until recently, technological limitations and a lack of operational legal clarity have hindered the effectiveness of tokenization. The development of ERC-3643 represents a complex yet essential endeavor, traversing practices array while maintaining strict mandates across jurisdictions. Overcoming these barriers seems to have been the driving force behind the creators from the start. Thereupon, we invite you to acquire an impact of ERC-3643 on the RWA tokenization with us!

Redefining RWA Tokenization with ERC-3643

Source: ERC-3643 Association

Diversification: The ERC-3643 standard assigns on-chain representation of broad resources ointment. This involves issuing digital tokens that stand as physical product quantity, value, and profit shares.

Exposure: A fractional ownership feature embedded into the token lowers an entry barrier while supplying more liquidity into the market and attracting less affluent individuals.

Transfer: The process of rights ownership and transfers has been formed into a permission-need framework.

Innovation: ERC-3643 tokens can be structured in the form of a basket of commodities, involving different market segments. Additionally, the protocol enables the creation of commodity-backed stablecoins, providing a lower-risk investment option.

Regulatory Versatility: Programmable token functions, multi-layered access controls, compliance checks, automated reporting, and other security mechanisms - these all prioritize alignment with both current and future regulations.

Find out the RWA definition & examples - we've it covered extensively here!

Integration of ERC-3643 into Global Supply Chains

Traceability: By tokenizing single products or batches, companies can track the journey of items in real time, from manufacturing to delivery. Undoubtedly, this level of validation is crucial for preventing counterfeits and ensuring item quality. 

Automation: ERC-3643 optimizes many supply chain processes including settlements and legal compliance checks. It reduces the need for intermediaries and cuts down project operational costs. Also, minimizes the risk of human error.

Storage Management: A more accurate and real-time view of inventory levels. Tokenization makes it easier to track stock movements and predict supply needs, leading to reduced wastage.

Cross-Border Orders: ERC-3643 may straightforward international transactions by providing a unified system for shipment tracking. This could help in reducing delays caused by customs checks and documentation.

Consumers' confidence: The legitimacy offered by ERC-3643 builds greater trust in brands, in particular, where authenticity and ethical sourcing are paramount.

Integration with IoT and AI: IoT devices can feed real-time data into the blockchain network, so AI analyzes these, which eventually leads to more informed decision-making. 

Security: ERC-3643 token metadata is protected against tampering and unauthorized access, especially due to advanced permissions and restriction features.

ERC-3643 and the World of Art

Revenue Streams: Artists, by selling divided, more affordable fractions of their compositions, generate income while retaining a portion of their creative capital. In regards, enthusiasts who were previously priced out of the market are now fully entitled to participate in this highly valued sector.

Authenticity: One of the perennial industry challenges was to maintain artwork's provenance and genuineness. ERC-3643 embeds more detailed information into the token. This blockchain-based approach ensures a tamper-proof record and appropriate infrastructure for copyright management.

Art Curations: ERC-3643 facilitates innovative exhibition possibilities. Galleries and museums, acting as halls of art, could tokenize or create virtual collections, meanwhile, spreading creator contributions to a global audience.

ERC-3643 Transforms Intangible Assets Offerings

Democratization: ERC-3643 enables the tokenization of IP and patents, also partial, so that inventors monetize licensing or commercialization of the rights in the form of tokens.

Distribution: Smart contracts can be programmed to automatically grant licenses and distribute royalties to token holders whenever the IP is used commercially. This reduces administrative overhead and ensures fair and timely payments to rights holders.

Auditability: ERC-3643 provides unparalleled simplicity in intellectual property trading. It also concerns applications, approvals, and transfers of patents. Immutable transaction statements with protocol security measures prevent disputes over rights ownership and utilization.

Collaboration: The standard facilitates new forms of joint ventures in IP development. Multiple parties can hold stakes in a paten, sharing risks, rewards more equitably, and so on. Spur innovations and continuous refinements motivate ERC-3643 principles then.

AI and ERC-3643 Join Together

Tokenization: Artificial Intelligence raises huge concerns about the authenticity and origin of content. The potential for misuse, such as deepfakes or falsified data, poses risks to publicly accessible information and makes the verification more essential than ever. ERC-3643 standard introduced by Tokeny, leverages a framework that can be instrumental in the AI-generated matter distribution. Blockchain technology's inherent characteristics ensure every piece is traceable back to its source, distinguishing between genuine creations and violent disinformation. Tokenization of AI content via ERC-3643 involves assigning a unique digital token, acting as a digital certificate. Each one contains metadata e.g. creation date, provenance, and any modifications made. ERC-3643's smart contract capabilities can also be programmed in a way acknowledging that specific criteria have been met before proliferation.

Fox Corporation, a mass media production & distribution company, has recently unveiled a prototype of a new open-source protocol named Verify, which is developed on the Polygon network. Publishers register their content and ensure provenance, securely marking each piece with a cryptographic signature. Since ERC3643 tailors mostly for permission-needed transfers, restricted access features, and programmable token lifecycle management rules, its implementation might refine such tools' performance shortly.

Source: Polygon Technology

Symbiosis: Various issues around intellectual property rights management, and data privacy must be carefully considered. ERC-3643 provides a starting point for proposing a legal-adherent tokenization process. Looking ahead, it could become a standard tool for the reliable distribution of trusted and valued sources.

Unraveling the Potential of Tokenized Infrastructure Projects

Accessibility: Generally, infrastructure projects like bridges, highways, or renewable energy have been the domain of institutional investors or government entities due to the substantial capital requirements. ERC-3643 expands these investment opportunities permitting small-scale fractional investment in similar, lucrative initiatives.

Flexibility: Described rather as long-term investments, these projects characterize limited liquidity. Potential secondary markets, introduced through tokenization, could encourage retail investors to consider entering the market despite legacy large-cap requirements. 

Management: A decentralized ledger helps monitor progress, fund allocation, and project profitability.

Financing: Raising capital for infrastructure projects is often a cumbersome and expensive process. ERC-3643 offers wider access to a pool of investors through token sales breaking geographical boundaries and allowing for quicker venture initiation.

Revenue Models: ERC3643 allocates shared yields based on the project income generation and the token ratio owned by the investor, similar to energy sales in solar farms. This model concentrates investor returns and operation success, creating a mutually beneficial scenario.

Cross-jurisdictional Compliance: Given the heavily regulated nature of infrastructure projects, the legal adherence-oriented design of the standard is a key advantage. It ensures contribution to local and international frameworks concerning investments, ownership, and revenue distribution.

Healthcare Enhancements through ERC-3643 Implementation

Research Funding: ERC-3643 facilitates securing funds for medical research and development, thanks to tokenized bonds or tokens issued by clinical examination sponsors.

Facilities: Systematic improvements to the healthcare ecosystem can be accomplished by tokenizing medical equipment or entire centers using the T-REX protocol. 

Data management: Personal data, medical case records, and other sensitive information, in the age of increasing digitization, could be also stored on the blockchain. Ethical aspects of their usage must be always obeyed. Relatedly, the ERC3643 smart contract, upon acquiring patient consent, would provide authorized access and seamless interaction between particular healthcare providers.

Regulations: The compliance-centric architecture of ERC-3643 targets legal integrity while respecting existing personal data processing practices. 

Conclusion

The implementation of ERC3643, as we've seen, extends far beyond the traditional financial instruments. The standard offers a blueprint for tokenizing assets that were once considered challenging.  The capability of ERC3643 to ensure regulatory adherence, coupled with its flexibility and scalability, marks it as an indispensable tool in modern asset management where the boundaries of asset ownership, accessibility, transfer, and utilization are being respected.

If you are interested in utilizing ERC-3643 or other blockchain-based solutions for your project, please reach out to contact@nextrope.com

How does ERC-3643 impact supply chains and art world?

  • ERC-3643 enhances supply chain traceability, automates processes, boosts consumer confidence, and enables fractional ownership in the art world, ensuring authenticity and provenance verification.

What benefits does ERC-3643 offer for intellectual property and infrastructure projects?

  • ERC-3643 facilitates IP tokenization, simplifies revenue distribution, and fosters collaboration. In infrastructure, it broadens investment opportunities, improves project management, and ensures regulatory compliance.

How does ERC-3643 contribute to healthcare and AI integration?

  • ERC-3643 secures funding for medical research, enhances facility management, and ensures data security in healthcare. It also aids AI content verification, ensuring authenticity and origin tracking.

Why is ERC-3643 significant for asset management?

  • ERC-3643 ensures regulatory compliance, offers flexibility and scalability, and provides a framework for tokenizing challenging assets, making it essential in modern asset management.

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AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

Gracjan Prusik

11 Mar 2025
AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

AI Revolution in the Frontend Developer's Workshop

In today's world, programming without AI support means giving up a powerful tool that radically increases a developer's productivity and efficiency. For the modern developer, AI in frontend automation is not just a curiosity, but a key tool that enhances productivity. From automatically generating components, to refactoring, and testing – AI tools are fundamentally changing our daily work, allowing us to focus on the creative aspects of programming instead of the tedious task of writing repetitive code. In this article, I will show how these tools are most commonly used to work faster, smarter, and with greater satisfaction.

This post kicks off a series dedicated to the use of AI in frontend automation, where we will analyze and discuss specific tools, techniques, and practical use cases of AI that help developers in their everyday tasks.

AI in Frontend Automation – How It Helps with Code Refactoring

One of the most common uses of AI is improving code quality and finding errors. These tools can analyze code and suggest optimizations. As a result, we will be able to write code much faster and significantly reduce the risk of human error.

How AI Saves Us from Frustrating Bugs

Imagine this situation: you spend hours debugging an application, not understanding why data isn't being fetched. Everything seems correct, the syntax is fine, yet something isn't working. Often, the problem lies in small details that are hard to catch when reviewing the code.

Let’s take a look at an example:

function fetchData() {
    fetch("htts://jsonplaceholder.typicode.com/posts")
      .then((response) => response.json())
      .then((data) => console.log(data))
      .catch((error) => console.error(error));
}

At first glance, the code looks correct. However, upon running it, no data is retrieved. Why? There’s a typo in the URL – "htts" instead of "https." This is a classic example of an error that could cost a developer hours of frustrating debugging.

When we ask AI to refactor this code, not only will we receive a more readable version using newer patterns (async/await), but also – and most importantly – AI will automatically detect and fix the typo in the URL:

async function fetchPosts() {
    try {
      const response = await fetch(
        "https://jsonplaceholder.typicode.com/posts"
      );
      const data = await response.json();
      console.log(data);
    } catch (error) {
      console.error(error);
    }
}

How AI in Frontend Automation Speeds Up UI Creation

One of the most obvious applications of AI in frontend development is generating UI components. Tools like GitHub Copilot, ChatGPT, or Claude can generate component code based on a short description or an image provided to them.

With these tools, we can create complex user interfaces in just a few seconds. Generating a complete, functional UI component often takes less than a minute. Furthermore, the generated code is typically error-free, includes appropriate animations, and is fully responsive, adapting to different screen sizes. It is important to describe exactly what we expect.

Here’s a view generated by Claude after entering the request: “Based on the loaded data, display posts. The page should be responsive. The main colors are: #CCFF89, #151515, and #E4E4E4.”

Generated posts view

AI in Code Analysis and Understanding

AI can analyze existing code and help understand it, which is particularly useful in large, complex projects or code written by someone else.

Example: Generating a summary of a function's behavior

Let’s assume we have a function for processing user data, the workings of which we don’t understand at first glance. AI can analyze the code and generate a readable explanation:

function processUserData(users) {
  return users
    .filter(user => user.isActive) // Checks the `isActive` value for each user and keeps only the objects where `isActive` is true
    .map(user => ({ 
      id: user.id, // Retrieves the `id` value from each user object
      name: `${user.firstName} ${user.lastName}`, // Creates a new string by combining `firstName` and `lastName`
      email: user.email.toLowerCase(), // Converts the email address to lowercase
    }));
}

In this case, AI not only summarizes the code's functionality but also breaks down individual operations into easier-to-understand segments.

AI in Frontend Automation – Translations and Error Detection

Every frontend developer knows that programming isn’t just about creatively building interfaces—it also involves many repetitive, tedious tasks. One of these is implementing translations for multilingual applications (i18n). Adding translations for each key in JSON files and then verifying them can be time-consuming and error-prone.

However, AI can significantly speed up this process. Using ChatGPT, DeepSeek, or Claude allows for automatic generation of translations for the user interface, as well as detecting linguistic and stylistic errors.

Example:

We have a translation file in JSON format:

{
  "welcome_message": "Welcome to our application!",
  "logout_button": "Log out",
  "error_message": "Something went wrong. Please try again later."
}

AI can automatically generate its Polish version:

{
  "welcome_message": "Witaj w naszej aplikacji!",
  "logout_button": "Wyloguj się",
  "error_message": "Coś poszło nie tak. Spróbuj ponownie później."
}

Moreover, AI can detect spelling errors or inconsistencies in translations. For example, if one part of the application uses "Log out" and another says "Exit," AI can suggest unifying the terminology.

This type of automation not only saves time but also minimizes the risk of human errors. And this is just one example – AI also assists in generating documentation, writing tests, and optimizing performance, which we will discuss in upcoming articles.

Summary

Artificial intelligence is transforming the way frontend developers work daily. From generating components and refactoring code to detecting errors, automating testing, and documentation—AI significantly accelerates and streamlines the development process. Without these tools, we would lose a lot of valuable time, which we certainly want to avoid.

In the next parts of this series, we will cover topics such as:

Stay tuned to keep up with the latest insights!

The Ultimate Web3 Backend Guide: Supercharge dApps with APIs

Tomasz Dybowski

04 Mar 2025
The Ultimate Web3 Backend Guide: Supercharge dApps with APIs

Introduction

Web3 backend development is essential for building scalable, efficient and decentralized applications (dApps) on EVM-compatible blockchains like Ethereum, Polygon, and Base. A robust Web3 backend enables off-chain computations, efficient data management and better security, ensuring seamless interaction between smart contracts, databases and frontend applications.

Unlike traditional Web2 applications that rely entirely on centralized servers, Web3 applications aim to minimize reliance on centralized entities. However, full decentralization isn't always possible or practical, especially when it comes to high-performance requirements, user authentication or storing large datasets. A well-structured backend in Web3 ensures that these limitations are addressed, allowing for a seamless user experience while maintaining decentralization where it matters most.

Furthermore, dApps require efficient backend solutions to handle real-time data processing, reduce latency, and provide smooth user interactions. Without a well-integrated backend, users may experience delays in transactions, inconsistencies in data retrieval, and inefficiencies in accessing decentralized services. Consequently, Web3 backend development is a crucial component in ensuring a balance between decentralization, security, and functionality.

This article explores:

  • When and why Web3 dApps need a backend
  • Why not all applications should be fully on-chain
  • Architecture examples of hybrid dApps
  • A comparison between APIs and blockchain-based logic

This post kicks off a Web3 backend development series, where we focus on the technical aspects of implementing Web3 backend solutions for decentralized applications.

Why Do Some Web3 Projects Need a Backend?

Web3 applications seek to achieve decentralization, but real-world constraints often necessitate hybrid architectures that include both on-chain and off-chain components. While decentralized smart contracts provide trustless execution, they come with significant limitations, such as high gas fees, slow transaction finality, and the inability to store large amounts of data. A backend helps address these challenges by handling logic and data management more efficiently while still ensuring that core transactions remain secure and verifiable on-chain.

Moreover, Web3 applications must consider user experience. Fully decentralized applications often struggle with slow transaction speeds, which can negatively impact usability. A hybrid backend allows for pre-processing operations off-chain while committing final results to the blockchain. This ensures that users experience fast and responsive interactions without compromising security and transparency.

While decentralization is a core principle of blockchain technology, many dApps still rely on a Web2-style backend for practical reasons:

1. Performance & Scalability in Web3 Backend Development

  • Smart contracts are expensive to execute and require gas fees for every interaction.
  • Offloading non-essential computations to a backend reduces costs and improves performance.
  • Caching and load balancing mechanisms in traditional backends ensure smooth dApp performance and improve response times for dApp users.
  • Event-driven architectures using tools like Redis or Kafka can help manage asynchronous data processing efficiently.

2. Web3 APIs for Data Storage and Off-Chain Access

  • Storing large amounts of data on-chain is impractical due to high costs.
  • APIs allow dApps to store & fetch off-chain data (e.g. user profiles, transaction history).
  • Decentralized storage solutions like IPFS, Arweave and Filecoin can be used for storing immutable data (e.g. NFT metadata), but a Web2 backend helps with indexing and querying structured data efficiently.

3. Advanced Logic & Data Aggregation in Web3 Backend

  • Some dApps need complex business logic that is inefficient or impossible to implement in a smart contract.
  • Backend APIs allow for data aggregation from multiple sources, including oracles (e.g. Chainlink) and off-chain databases.
  • Middleware solutions like The Graph help in indexing blockchain data efficiently, reducing the need for on-chain computation.

4. User Authentication & Role Management in Web3 dApps

  • Many applications require user logins, permissions or KYC compliance.
  • Blockchain does not natively support session-based authentication, requiring a backend for handling this logic.
  • Tools like Firebase Auth, Auth0 or Web3Auth can be used to integrate seamless authentication for Web3 applications.

5. Cost Optimization with Web3 APIs

  • Every change in a smart contract requires a new audit, costing tens of thousands of dollars.
  • By handling logic off-chain where possible, projects can minimize expensive redeployments.
  • Using layer 2 solutions like Optimism, Arbitrum and zkSync can significantly reduce gas costs.

Web3 Backend Development: Tools and Technologies

A modern Web3 backend integrates multiple tools to handle smart contract interactions, data storage, and security. Understanding these tools is crucial to developing a scalable and efficient backend for dApps. Without the right stack, developers may face inefficiencies, security risks, and scaling challenges that limit the adoption of their Web3 applications.

Unlike traditional backend development, Web3 requires additional considerations, such as decentralized authentication, smart contract integration, and secure data management across both on-chain and off-chain environments.

Here’s an overview of the essential Web3 backend tech stack:

1. API Development for Web3 Backend Services

  • Node.js is the go-to backend runtime good for Web3 applications due to its asynchronous event-driven architecture.
  • NestJS is a framework built on top of Node.js, providing modular architecture and TypeScript support for structured backend development.

2. Smart Contract Interaction Libraries for Web3 Backend

  • Ethers.js and Web3.js are TypeScript/JavaScript libraries used for interacting with Ethereum-compatible blockchains.

3. Database Solutions for Web3 Backend

  • PostgreSQL: Structured database used for storing off-chain transactional data.
  • MongoDB: NoSQL database for flexible schema data storage.
  • Firebase: A set of tools used, among other things, for user authentication.
  • The Graph: Decentralized indexing protocol used to query blockchain data efficiently.

4. Cloud Services and Hosting for Web3 APIs

When It Doesn't Make Sense to Go Fully On-Chain

Decentralization is valuable, but it comes at a cost. Fully on-chain applications suffer from performance limitations, high costs and slow execution speeds. For many use cases, a hybrid Web3 architecture that utilizes a mix of blockchain-based and off-chain components provides a more scalable and cost-effective solution.

In some cases, forcing full decentralization is unnecessary and inefficient. A hybrid Web3 architecture balances decentralization and practicality by allowing non-essential logic and data storage to be handled off-chain while maintaining trustless and verifiable interactions on-chain.

The key challenge when designing a hybrid Web3 backend is ensuring that off-chain computations remain auditable and transparent. This can be achieved through cryptographic proofs, hash commitments and off-chain data attestations that anchor trust into the blockchain while improving efficiency.

For example, Optimistic Rollups and ZK-Rollups allow computations to happen off-chain while only submitting finalized data to Ethereum, reducing fees and increasing throughput. Similarly, state channels enable fast, low-cost transactions that only require occasional settlement on-chain.

A well-balanced Web3 backend architecture ensures that critical dApp functionalities remain decentralized while offloading resource-intensive tasks to off-chain systems. This makes applications cheaper, faster and more user-friendly while still adhering to blockchain's principles of transparency and security.

Example: NFT-based Game with Off-Chain Logic

Imagine a Web3 game where users buy, trade and battle NFT-based characters. While asset ownership should be on-chain, other elements like:

  • Game logic (e.g., matchmaking, leaderboard calculations)
  • User profiles & stats
  • Off-chain notifications

can be handled off-chain to improve speed and cost-effectiveness.

Architecture Diagram

Below is an example diagram showing how a hybrid Web3 application splits responsibilities between backend and blockchain components.

Hybrid Web3 Architecture

Comparing Web3 Backend APIs vs. Blockchain-Based Logic

FeatureWeb3 Backend (API)Blockchain (Smart Contracts)
Change ManagementCan be updated easilyEvery change requires a new contract deployment
CostTraditional hosting feesHigh gas fees + costly audits
Data StorageCan store large datasetsLimited and expensive storage
SecuritySecure but relies on centralized infrastructureFully decentralized & trustless
PerformanceFast response timesLimited by blockchain throughput

Reducing Web3 Costs with AI Smart Contract Audit

One of the biggest pain points in Web3 development is the cost of smart contract audits. Each change to the contract code requires a new audit, often costing tens of thousands of dollars.

To address this issue, Nextrope is developing an AI-powered smart contract auditing tool, which:

  • Reduces audit costs by automating code analysis.
  • Speeds up development cycles by catching vulnerabilities early.
  • Improves security by providing quick feedback.

This AI-powered solution will be a game-changer for the industry, making smart contract development more cost-effective and accessible.

Conclusion

Web3 backend development plays a crucial role in scalable and efficient dApps. While full decentralization is ideal in some cases, many projects benefit from a hybrid architecture, where off-chain components optimize performance, reduce costs and improve user experience.

In future posts in this Web3 backend series, we’ll explore specific implementation details, including:

  • How to design a Web3 API for dApps
  • Best practices for integrating backend services
  • Security challenges and solutions

Stay tuned for the next article in this series!